OREANDA-NEWS. July 20, 2010. JSC Latvijas kugnieciba continues active negotiations with the JSC Ventspils nafta about restructuring of their mutual transactions

Public Joint Stock Company „Latvijas kugnieciba” (Latvian Shipping Company (LSC)) carries on active negotiations with the Company’s largest shareholder JSC „Ventspils nafta” (VN) about change of the mutual transaction conditions that are most favourable for all shareholders of the both companies and that would help to ensure stability of the companies’ financial results and would foster further economic activity of both the LSC and VN Group.

Only after conclusion of the mentioned negotiations will the LSC Management Board be able to take responsibility stipulated by legislation and other laws and regulations about inclusion of true and objective financial information in the Company’s financial documentation, including the financial statement of 2009. The current speculations regarding the financial data to be included in the financial statement of 2009 would have to be considered as flatly illegitimate and misleading for all LSC investors, about what the LSC Management Board would have to take the statutory administrative liability.  This position of the LSC can be explained by the fact that achieving an agreement with the VN about restructuring of transactions that would logically result with change of several accounting conditions, the financial results included in the financial statement of 2009 would substantially differ from the current potential data, certainly exceeding the 10% difference level.

LSC has repeatedly publicly informed all its investors that considering the drastic changes in the mass media, printing and publishing , as well as the real estate markets they already since the end of 2009 are negotiating with the VN about restructuring of several enterprise and property purchase transactions that were concluded in 2008 pursuant to the present objective market situation, guarantee of interests of all shareholders and the LSC current possibilities, ensuring also further stable financial and economic operation of the LSC. The LSC itself has drawn attention that observing the negotiation process submission of the LSC audited financial statement of 2009 within the set term will be impossible; however, in the same time LSC has reasonable hopes that preparation of the audited financial statement will be ready until December 2010 and has in good time announced Shareholders’ meeting for approval of the financial statement on 17 December 2010.

„A formal fulfilment of the requirements cannot be prior in situation when we speak about the future of the Company. Or else we would be misleading our shareholders,” emphasized Mr. R. Veckagans, Member of the LSC Management Board and Vice-President on financial issues.  Pursuant to the Republic of Latvia Financial Instrument Market Law Section 59 the issuer of financial instruments may not provide false or misleading information about significant events. But the Annual Accounts Law Section 4 provides that the annual accounts shall provide a true and fair view of the assets and liabilities, financial position, profit or loss and cash flow of the company. The current situation does not allow LSC to execute these statutory provisions; therefore the LSC is of the opinion that it is impossible to submit the audited financial statement until 31 July 2010. 

LSC is a public Joint Stock Company, the shares of which are quoted in the Stock Exchange „NASDAQ OMX Riga”. LSC is among the largest tanker owners in the world in medium sized or handy tankers category and it is also in a leading position among similar companies in Northern Europe when it comes to oil shipments.